Developmental systems are controlled by modulating gene expression in response to internally programmed signals responding to external signals. Our laboratory is interested in studying the molecular interactions and the signaling that occur to regulate gene expression and the cell cycle. We exploit the genetic systems available in Escherichia coli, its plasmids, and its viruses (e.g., bacteriophage lambda) to help us understand (1) regulation at the levels of transcription initiation and elongation, translation initiation, and cell growth and cell cycle control signals and (2) Recombination and cloning using lambda Red functions. The N gene of lambda is the first gene expressed following viral infection. The function of the N protein is necessary for expression of most other lambda genes by its actions as a positive regulator. Positive activation of other genes occurs by N binding to specific RNA sites called NUT, modifying the RNA polymerase transcription complex. This modified polymerase complex reads through transcription terminators to distal lambda genes. Thus, the expression and action of N are central to the control of lambda development. We have recently determined that N is subject to novel posttranscriptional regulatory circuits. Expression of the N gene is autoregulated by N binding to the NUT RNA site 150 bases upstream of the N gene, from which the translation of N 100-fold over this long distance. The N-modified RNA polymerase complex is required for this translational repression. Thus, antitermination and translation repression by N are coupled. This may be caused by a specific folding of the RNA structure into a long duplex that brings the NUT RNA into close juxtaposition with the N ribosome binding site. RNaseIII, a ds RNA endonuclease, recognizes the stem structure and cleaves it, separating NUT from the N RNA. This cleavage prevents N translational repression but actually enhances antitermination, presumably by releasing the antitermination complex from its interaction with the NUT RNA. The degree of RNaseIII processing of the N-leader controls the amount of translation repression by N. Since RNaseIII expression itself is controlled by growth rate of the cells (see below), the cellular growth rate determines how much N protein will be made during a lambda infection. In rich media, high levels of RNaseIII exist in the cell thereby preventing any repression of N, while in poor media low levels of RNaseIII exist which is insufficient to prevent repression of N levels. The biology and development of lambda depends upon N levels which is modulated by RNaseIII and growth rate. Additionally, we have found that RNaseIII is expressed from an operon in which an essential low-molecular-weight GTP-binding protein, Era, is also encoded. From this operon, RNaseIII and Era expression is coordinately regulated and increases in relation to growth rate. This growth rate regulation of RNaseIII and Era occurs at the posttranscriptional level, but the mechanism remains unknown. The accumulation of adequate levels of Era is essential for cytokinesis to be completed and cell growth to continue. We speculate that a threshold level of Era must accumulate before Era-GTPase is activated by a cellular signal to cause cell division and to allow cell growth to continue. Era binds to precursor RNA and may use this binding as a measure of RNA synthesis and the signal to activate its GTPase. We believe RNaseIII and Era are key components that couple regulation of growth and the cell cycle. The crystal structure of both proteins has now been determined. A model for dsRNA cleavage by RNase III has been postulated from the structures. Because RNase III of eukaryotes is the active component in RNA-inhibition (RNAi), the structure and mechanism of cleavage by RNase III is of critical importance in understanding RNAi.